Elon Musk Says Tesla Is "Anti-Selling" the Model 3

On Wednesday, during a Tesla investor conference call, CEO Elon Musk dropped the fact that Tesla is, in a sense, discouraging purchases of the Model 3. “We anti-sell the 3,” he said. That may strike rational folks as peculiar — especially given that he’s previously encouraged potential buyers to “act fast” — but, from Musk’s perspective, it makes sense.

Investors were asking the CEO whether Tesla is hitting its challenging production goals, which Musk claims it is. The self-imposed shipment deadlines are all on track, he said, which means early birds, who reserved the relatively affordable, electric, soon-to-be-fully autonomous Model 3, should indeed receive their vehicles around the end of next year. Those who have not yet reserved the vehicle, yet still intend to do so, may encounter some clever salesman tactics upon visiting a Tesla store.

“When somebody comes into our store to buy a Model 3, we say, ‘Well, you know, why don’t you buy a Model S or an X instead?’ So we anti-sell the 3. Still, a lot of people ordered the 3, but whatever.”

Elon Musk at the Model 3 unveil in late March, 2016.

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He went on to say that Tesla “basically sold out the first year of production.” Therefore, there’s little incentive for Tesla to “sell the thirteenth month of production,” in his mind. “Very little gain to be had there, in doing so.”

Regarding reservation numbers, Musk again broke from his previous record during the call. “As for the 3 deposit number, this is not something we comment on, and not something that is a figure of merit in any way.” After he unveiled the Model 3, he was quick to tout the figure: 325,000 deposits, which equated to $14 billion in implied future sales, which meant the biggest product launch ever.

Over 325k cars or ~$14B in preorders in first week. Only 5% ordered max of two, suggesting low levels of speculation.

The speculative type could easily have a field day with these aberrations. Is Tesla discouraging sales because it knows that it will fail to meet production dates? Is Musk no longer sharing the reservation count because scores have backed out? (Model 3 deposits are, after all, fully refundable; after the initial fervor, and the far-off delivery date reality check, it’s possible that many reneged.)

The Tesla Model 3.

Musk did not explicitly imply any of these contingencies — but he was speaking to investors, who need to trust that he’s doing his job and doing it well. As he puts it, he just thinks people deserve Teslas today, and not at some vague, distant date. “We didn’t want to get people too distracted from today’s product, in favor of tomorrow’s product,” he said. It sure doesn’t hurt that the Model S and X, respectively, cost about two and three times as much as the Model 3.

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